1. Field of the Invention
The invention relates generally to a new and improved automated system and method for facilitating management of individual benefits or assets, such as those of an employee or consumer of services, that is capable of interfacing with a variety of entities or “stakeholders” who will or who potentially will benefit, financially or in some other manner, for example, by the acquisition of goodwill. More particularly, the invention relates to a system which creates an infrastructure that is used to connect together consumers, employers, health care providers and health plans and their affiliates so as to combine the process of benefits management and enrollment with the remainder of the health care delivery system.
2. Description of the Related Art
Prior systems and methods of providing health care services and administering employee health care benefits have proven unsatisfactory in recent years for at least several reasons. Such systems and methods include the traditional “fee-for-service” or “indemnity” coverage model, the so-called “managed care”, “HMO”, “capitation” or “defined benefit” model, and the more recent “defined contribution” or “self-directed health plan” models. In the “fee-for-service’ model, health care providers (e.g., physicians, clinics, hospitals and the like) bill patients whatever they deem appropriate for each visit or service rendered. If the patient has insurance, either the patient or the provider submits a claim for each visit or service and the insurance carrier determines how much of the provider's fee is eligible for reimbursement. If the amount the provider charged exceeds the amount the insurance company is willing to reimburse, it falls to the patient to make up the difference. The fee-for-service model has fallen into disfavor with employers, the insured and the insurers, because the available systems and methods for management and oversight of the various implementations of the model are less than efficient, increasing costly and vulnerable to mismanagement and even fraud.
In the “managed care”, “capitation” or “defined benefit” model, a fixed per capita amount is paid to a provider for each person in the per capita population. Thus, the provider is not paid on a per visit or per service basis. The provider is paid the fixed amount for each participant in the health care plan regardless of how many office visits or laboratory tests or procedures are performed for a given patient or whether the patient ever avails the provider of services at all. The “Health Maintenance Organizations” or “HMO” is a ubiquitous example of a system based on the defined benefit model. There is dissatisfaction with defined benefit plans from the point of view of the employee/patient, the employer and the providers, at a minimum. The providers suffered financially in the transition from the fee-for-service system to the defined benefit model. Moreover, complicated administrative procedures mandated by the defined benefit plans before a provider can provide certain services lead to inefficiencies, provider overhead expenses, and situations in which non-physicians effectively are making decisions about what is best for a patient. The employee/patient is wary of defined benefit plans because the capitation model gives them concern that they may be denied a procedure that is otherwise indicated because of financial rather than medical reasons. The providers are faced with practical and very real cost/benefit analysis decisions, which arguably impact the provider's ability to provide the level of care that would be in the best interest of each patient. When employees/patients feel particularly aggrieved, the patients increasingly are bringing lawsuits against employers and health care plans. Employers likewise are unhappy with defined benefit plans because the cost of the premiums and of administering the plans is ever escalating and the bottom-line outcome of the employers' investment is not totally satisfying to the employees. The managed care/HMO plans are also designed as first-dollar coverage plans, insuring people from the very first dollar spent on healthcare. This type of coverage, along with the many preventative services covered under the plan design, with the perception to the patient that it only costs a small co-payment to visit a doctor, has led to the rise in premiums of these plans for employers.
The traditional “defined contribution” model dictates that employers allocate and distribute a predetermined sum for the purchase of health care benefits for employees, and the employees then are tasked with reviewing, selecting, and paying for their health care plan. A point of contrast of the defined benefit model with the defined contribution model thus is that in the former, the employers rather than the employees, review and select from among various health care plans and then offer those plans to employees. The defined contribution model ostensibly offers a significant benefit to employers, because the employers no longer have to deal directly or as intensely with administering the health care plans. Defined contribution health care has not been attractive to employees to date, however, because the terms of the health care plans are difficult to comprehend and are increasingly opaque in terms of benefits, services, providers and reimbursement protocols. In a traditional defined contribution model, the employees in theory have more control over their health benefits, because they can spend the employer's contribution howsoever they wish. In practice, though, the benefits plans are too complicated and inscrutable that employees risk choosing a plan that will not give them the minimal coverage they ought to have, and the plans similarly are too obtuse as to give an individual insight as to how best to take advantage of the contribution. In addition, these defined-contribution plans pose very high-deductibles for the employees/patients. The healthier employee may choose to accept such a plan, because of the potential to save money, whereas, the employee who may have a chronic debilitating illness, opts not to select this type of plan because of greater financial exposure to self, and thus, chooses for the low “out of pocket” cost HMO/managed care plan. This will result overtime in a greater divide between healthier and ill employees, causing “adverse selection” and even greater health benefit cost increases in the future.
Complicating the situation is the enactment and subsequent adjustment of federal regulations which impact the manner in which health care services are purchased, administered and provided which require existing systems in place at healthcare providers, employers and health care plans alike to be changed to insure compliance with the regulations. Such changes generally are costly and disruptive to the various entities involved and, if not implemented properly, can lead to non-compliance legal liability. One such regulation is the Health Insurance Portability and Accountability Act (HIPAA), the deadline for compliance with which is the end of 2002, middle of 2003. Provisions of HIPAA, for example, call for the following: unique identifiers for individuals, employers, healthcare providers, and health care plans; security features in administrative procedures, physical safeguards, technical services and technical mechanisms; privacy features in the form of modification of typical policies, procedures and systems in order to protect the confidentiality of medical records and patient's health information; and communication and data elements affecting transactions such as enrollment/disenrollment, eligibility/benefit inquiries, referral certification and authorization, submission of claims, coordination of benefits, reimbursement for claims, status of claims, and payment of premiums.
With the advent of the Internet, consumers are becoming more and more accustomed to being able to access information anytime and anywhere, and are increasingly using the world wide web to obtain health information and assistance in informed decision making. Accordingly, those skilled in the art have long recognized the need for an improved system and method for the management of health care services which is Internet-based and efficient, cost-effective from the point of view of the consumer. It is desirable to provide employers a new model for healthcare benefits that is cost-effective and reduces administrative burden, provides healthcare providers reimbursement in a timely manner, and provides technology to streamline communication with their members, clients, and providers. The present invention clearly fulfills all these needs.